The U.S. economy is expanding below its potential, Summers
told a conference in Abu Dhabi today. Underinvestment by the
government should be more of a concern for U.S. policy makers
than the size of the national debt, he said, while adding that
diminishing benefits from the Fed’s quantitative easing were
grounds for concern.

“We need to find ways to encourage the economy to grow
more rapidly through increased demand that operates not so much
through the provision of liquidity, but operates more directly
on the spending side,” Summers said.

Fed Chair Janet Yellen said last week in testimony to the
Senate Banking Committee that the central bank intends to reduce
asset purchases at a “measured” pace and that the bond-buying
program is likely to end in the fall. Fed policy makers will
probably keep interest rates low to nurture the expansion even
as they take measured steps to reduce stimulus.

Interest rates of around “2.5 percent in a currency we
print ourselves, and construction unemployment rate in double
digits,” should pave the way for increased investment in
infrastructure such as New York’s John F. Kennedy International
Airport, Summers said.

“I suspect that few in this room think that the United
States should be proud of Kennedy airport as the gateway to a
great city in a great nation,” he said. If current interest
rates and levels of unemployment don’t make for “the right
moment to repair Kennedy airport, when will that moment ever
come?”